All is Fair Game

Owners value to Appraisers Value

July 10th, 2017 10:19 AM

Estimates Widens for Sixth Consecutive
Month

Gap Between Home Appraisals and Owner
Estimates Widens for Sixth Consecutive Month

• Quicken Loans’ National HPPI shows appraised
values were 1.93% lower than homeowners estimated in May
• Home values rose 0.63% nationally in May, with a 4.92% year-over-year
increase, according to the Quicken Loans HVI

DETROIT, June 13, 2017 – Home values
continue to lag owners’ expectations. Appraised values were an average of 1.93
percent lower than what homeowners expected, according to Quicken Loans’
National Home Price Perception Index (HPPI). The gap between estimated value
and appraised value, on a national level, continued to widen for a sixth
consecutive month.

Appraisals are falling farther from owner
estimates, but they are rising higher each month. Home values rose an average
of 0.63 percent in May, and increased 4.92 percent year-over-year, as measured
by Quicken Loans’ National Home Value Index (HVI).

Home Price Perception Index
(HPPI)

At the beginning of the
mortgage process a homeowner estimates what their home is worth. Later in the
process an appraiser reviews the home, and the local comparable sales, to
establish their opinion of the home’s value. The Quicken Loans HPPI showed that
owners’ home value estimates were an average of 1.93 percent higher than
appraisers’ opinions of the value, at a national level. There was a slight
widening between the two data points since April, when there was a 1.90 percent
difference. May is the sixth month the two valuations moved farther apart.
Despite the national average, perceptions varied across the country. In Denver
or Dallas appraisals were nearly 3 percent higher than expected, while in
Philadelphia or Baltimore appraised values were more than 3 percent lower than
what homeowners estimated.

“It’s important for consumers to see the HPPI and not only think
about the difference in perceptions, but the different perceptions across the
country, said Bill Banfield, Quicken Loans Executive Vice President of Capital
Markets. “Home values, and home value changes, vary widely depending on the
city you’re in. Homeowners, and those looking to buy a home, should keep a
close eye on their local market to better understand home values in their area,
and the trend they are on.”

Home Value Index (HVI)

Home values rose at a national
level, and in much of the country, according to the Quicken Loans HVI – which
measures home value changes based solely on appraisals. Nationally, appraised
values increased 0.63 percent from their level in May, and rose 4.92 percent
when viewed annually. The Northeast was the only region measured that showed a
home value loss, with appraisals dropping 1.63 percent since the previous
month. However all four regions had year-over-year gains, ranging from a 1.15
percent increase in the Northeast to a 6.85 percent increase in the West.

“The strong demand for housing paired with the low levels of
inventory continue to push values higher,” said Banfield. “Prices are rising as
values push higher, making many parts of the country enticing markets for
sellers. Many owners will find that they can get more than expected out of
their home.”